2008 Financial Crisis: Iceland’s Then & Now

1548 words - 7 pages

The aftermath of Iceland’s financial turmoil left the country marked by economic instability, people’s distrust towards banks, sharp decrease in economic growth and private consumption, and a colossal amount of public debt. Such insecurity was followed by vast changes, ranging from the general population’s view on the government itself - seeking a more transparent rule of law and its implementation of legitimate policies to sweep the people off of financial worries – to revival of people’s conscience towards innovation, investment, and recovery.
The financial crisis inevitably steered several important political implications visible today Iceland. With the immediate resignation of ...view middle of the document...

The active participation and awareness of its citizens, as depicted through series of non-violent movements – the “Kitchenware Revolution” – Iceland is on its way to regaining people’s trust. Many people participated and voiced out to issues they were not even sure about. Being the progressive country that Iceland was already, Iceland produced the first openly gay Prime Minister and overly expressed its frustration and mistrust towards the government. People stuck together – many of Icelanders went back to their roots by specializing in fishing industry. The government incentivized the people by opening up all of its fishing sites and allowing every citizen to catch and sell up to 650 kilograms of fish per day. This not only encouraged amateur fishermen but also boosted the economy with fishing industry taking up 42% of Iceland’s exports. The public also encouraged innovative and creative minds, with a good number of people now concentrating on special fields such as the renewable and alternative energy for future uses. What might have been the most important factor for Iceland’s economic revival is maybe its outstanding birthrate. Half of the population is under the age of 35, with an average of 2.2 children per woman, and the rate of women’s employment is highest in the world and even encouraged by the government. A country, vastly comprised of the young population with innovative minds, who are also well educated and well connected with 95% of the population with access to the modern technology, the positive consequences cannot be ignored.
Icelanders conservatism has led this country to an “economic and mental isolation,” where foreign investments are scarce and exportations are inadequate. Although there are ongoing negotiations and debates on regarding the topic of Iceland’s possible fusing to the European Union, the majority of the population is still against the of what being a member of the European Union will imply for their borders. The self-sustaining and self-sufficient model Icelanders’ identity, moral, and belief systems are compromised by the E.U. However, being a part of the Eurozone could possibly avoid the future recurrence of another economic turmoil, especially since Iceland’s geographical size, limited fiscal capacity, unstable currency valuation, and its inability to evade the demise of its banking sector because of limited local fiscal capacity all sum up to its economic vulnerability. The notion of submission has been threatening to the once strong and ruthless Vikings, raising hostility towards the British because of its legislation of “Anti-Terrorism, Crime, and Security Act” against Iceland.
Though efficient, Iceland’s economic recovery will require extensive long-term policies to sustain its development and continuous economic growth. Iceland needs to strengthen its political stability by implementing right policies so to provide transparency to its citizens, entrust accountability of the...

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